The U.S. Securities and Exchange Commission (SEC) is radically shifting its approach to cryptocurrency and blockchain-based financial systems. At yesterday's conference titled "America's Leadership in the Digital Finance Revolution," the agency's chairman, Paul Atkins, introduced a new initiative called "Project Crypto." With this initiative, the SEC aims to modernize securities regulations to include crypto assets and on-chain transactions.
In his speech, Atkins stated that this transformation is necessary as part of his vision to "make America the capital of the crypto world." "When markets can operate seamlessly on-chain, there's no point in adding unnecessary intermediaries just to impose a brokerage system," Atkins said, emphasizing that current regulations are outdated and should not stifle innovation.
Tokenization and New Financial Structures
The project focuses specifically on tokenization. This refers to the process of creating digital representations of publicly traded securities, real-world assets, or any other value on the blockchain. However, these tokens do not provide direct ownership of the asset itself. Nevertheless, this technology is seen by figures like BlackRock CEO Larry Fink as a critical step in the "technological revolution of financial markets."
The world's leading crypto platforms, Robinhood, Gemini, and Kraken, have already begun offering tokenized stocks to their users outside the US. Coinbase is awaiting SEC approval to offer a similar service in the US.
"Super Apps" on the agenda
Another issue Atkins emphasizes is "super apps." Apps like WeChat and Alipay, which have become a part of daily life in China, combine numerous services under one roof, from payment systems and messaging to social media integration and financial transactions. The SEC plans to simplify multiple licensing requirements and introduce a more efficient licensing model to enable such applications to thrive in the US. The super app Coinbase unveiled a few weeks ago is an early example of this transformation.
Crypto custody, security classification, and flexible regulation
Other topics the SEC is addressing include new regulatory models for crypto custody services, establishing clear boundaries for whether a token is considered a "security," and ensuring this classification doesn't carry a negative connotation. Atkins stated that exceptions and "safe harbor" regulations could be introduced for certain transactions.
Furthermore, a framework is being developed that would allow for direct trading of securities on the blockchain and support decentralized structures. In this regard, it was emphasized that traditional National Market System (NMS) regulations need to change.
Finally, Atkins announced plans for a new regulation called a "general innovation exemption" to allow innovative projects to quickly launch. This exemption would facilitate the launch of projects that don't fully comply with existing laws but meet certain principles and reporting requirements.
